Análisis de mercado diario

GBPUSD has gained over two percent to breach 1.35, reaching its highest level since May 2018, as the UK election’s exit polls show the Conservatives winning a clear majority. The Pound is also currently at its strongest level versus the Euro since June 2016, with Sterling also gaining against all other G10 currencies. If the official results indeed prove as much over the coming hours, a Conservative majority would pave the way for Boris Johnson’s Brexit deal to be approved in parliament by end-January 2020, while alleviating concerns over the UK's economic outlook.

However, once the initial euphoria settles, investors are then likely to turn their attentions to the transition period that the UK needs in order to formulate its future relationship with its largest trading partner, the European Union. That could make for another bumpy ride for the Pound in 2020. At least Sterling bulls can enjoy their time in the sun now, while knowing that the support level for GBPUSD has been raised significantly, given that the UK election risk has passed.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

GBPUSD is trading above the 1.32 mark, its highest level since March, as markets expect a Conservative victory in today’s UK election. An outright Conservative majority is set to break the Brexit impasse within Westminster, enabling the UK to leave the European Union by January 31. Should the official result fall in line with market expectations, any gains for GBPUSD are likely to be capped around 1.35 considering that much of this result has already been priced in. The polling stations close at 2200 GMT, when we also get the exit polls, which have historically been a reliable indicator for general election results.

Still, that doesn’t mean the UK election result is a done deal, considering that the UK political arena has thrown up huge surprises in recent years. A hung parliament or a surprise Labour victory could result in Sterling rapidly unwinding recent gains and falling back towards the mid-1.20s against the US Dollar.

Dollar weakens as Fed set to stand pat on US interest rates in 2020

The Dollar index (DXY) has weakened towards the 97 psychological level, taking its year-to-date gains to less than one percent, after Fed chair Jerome Powell signaled that the central bank is set to keep US interest rates unchanged through 2020. With the Fed seemingly raising the bar on US interest rate hikes, that leaves Dollar bulls with one less leg to stand on.

The DXY’s 2019 gains could come under further pressure if markets see another significant bout of risk-on sentiment However, should the Pound see a steep decline on either a hung parliament or a shock Labour victory, that could help alleviate the downward pressure on the Dollar index over the near-term.

Tumultuous Thursday ahead?

Besides the UK elections, there are other key events today that also warrant investors’ attention. The European Central Bank is set to make a policy decision, the first under its new President Christine Lagarde. Even though investors expect the bank to leave its current policy settings intact at this meeting, any clues on future policy direction from Lagarde could greatly influence the Euro’s outlook, considering that the new ECB President has already announced a policy review. Lagarde’s style and tone of communication will be key things to watch.

The  signing of the ‘phase one’ US-China trade deal will continue to act as the primary driver for  global market sentiment, as US President Donald Trump is reportedly set to meet his trade team today. Any indication of an agreement would be another shot in the arm for risk assets, although the unpredictability of US-China negotiations ensures that a sudden selloff in risk assets cannot be fully ruled out.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.

Traders and investors are bracing for a volatile week ahead as several events may determine the direction of markets for the foreseeable future.

Will the Conservatives secure a majority in the UK election?

Looking at where Sterling stands now, it seems evident that currency traders have been pricing in a Conservative majority in Parliament. With only a few days remaining until voters head to the ballot box on Thursday, bookies and opinion polls are showing the Tories still on course for a solid victory.

This would mean PM Johnson can get his Brexit deal through Parliament before Christmas, so taking the UK out of the EU by the end of January. Such an outcome will reduce uncertainty, but that wouldn’t be the end of the story as the UK still needs to reach a trade agreement with the EU. Expect the Pound’s upside to be limited in the event that the Conservatives win a majority on Thursday, as much of this outcome has already been priced in.

However, traders should be reminded of the most recent UK election two years ago and also the referendum result in 2016. Financial markets got both those results completely wrong and so there is a chance this could happen again. The possibility of another hung parliament shouldn’t be completely ruled out and traders need to be prepared for such a scenario. This would further delay Brexit and mean continued uncertainty for UK businesses and the economy, which in turn could hit Sterling hard and take it back below 1.28.

US-China trade talks

With less than a week until the December 15 deadline for the US to impose new tariffs on China, investors will be closely watching statements from US and Chinese officials. As of now, all that we have heard about is that trade talks are heading in the right direction. However, there aren’t any signs yet of a deal taking place in the next few days.

With US equity markets holding near record highs, most market participants believe that new tariffs will be delayed. President Trump doesn’t want to upset investors as we approach the 2020 Presidential elections as he needs to improve his approval rating. But given his unpredictable nature, it's very difficult to anticipate his next move.  A decision to delay tariffs for a few weeks, along with robust retail sales data released on Friday may provide a further push to equity markets. If Trump announces that December 15 tariffs will take effect, get ready for a big rally in safe-haven assets and a similar sized sell-off in stocks.

Fed and ECB policy decisions

After Friday’s robust US jobs report, Fed policymakers have strong justification as to why they will end the mid-cycle adjustment which has seen three interest rate cuts since July. We do not expect any significant change in language, but it will be interesting to see if growth and inflation forecasts have changed since September.

Inflation data will be released on the same day the Fed announces its decision. If CPI moves above 2%, there’s a chance the Fed will begin leaning towards tightening policy rather than loosening. That’s especially the case if a “phase one” trade deal gets signed.

The ECB is also expected to stand pat when it delivers its policy decision the following day. Instead, the focus will be on Christine Lagarde’s press conference as she delivers her first statement at the helm of the central bank. Investors want to know whether her approach will represent a continuation of Draghi’s policies or whether she has a different strategy.

Exención de responsabilidad: El contenido de este artículo incluye opiniones personales, y no debe ser interpretado como asesoramiento sobre inversión personal y/o de otro tipo y/o una oferta y/o solicitud de ninguna transacción con instrumentos financieros y/o garantías y/o pronóstico de rendimiento futuro. ForexTime (FXTM), sus afiliados, agentes, directores, responsables y empleados no garantizan la precisión, validez, puntualidad o compleción de ninguna información o dato disponible, y no asume ninguna responsabilidad por cualquier pérdida que resulte de cualquier inversión realizada en base a ellos.